Compliance Check

jimmo

ioscorpio wrote: »

[FONT=&quot]The only difference is I return home on a daily basis and do not stay away overnight.[/FONT]

The big difference is that you are an agency worker, not a regular employee and the agency legislation applies to you.

If we take the example you have quoted from EIM 32011 the regular employee does attend a number of temporary workplaces and can claim travelling and subsistence expenses as explained there.

However the effect of the agency legislation is that each agency assignment is regarded as a separate employment so that when the worker goes to Gloucester for the week he goes to a new job for a week. That job has only one workplace, and, in the context of a fixed term employment, it is not a temporary workplace.

http://www.hmrc.gov.uk/manuals/eimanual/EIM32125.htm

Whilst I think you are on a loser here, maybe you should expect that of a former taxman. Can I suggest you spend a bit of time reading what HMRC has to say about agency workers in the Employment Status Manual?

Start here and work through the linked pages, particularly the ones relating to overarching contracts.

http://www.hmrc.gov.uk/manuals/esmmanual/ESM2000.htm



At this stage of the HMRC compliance check I am not too clear on why they require a mileage log from you. Is that all they have asked for?

At the moment we, on this forum, are considering the principle of whether your journeys from home to work are allowable or not and the same principles apply no matter what the mileage is. In my days as a taxman I would have asked you for a copy of your contract or agreement with the agency and a mileage log but would have been far more interested in the contract or agreement.

In post #8 you gave a mileage figure of 11898. If we call that 12,000 my scribbling on the back of a fag packet suggests that is worth £900 a year to a basic rate taxpayer or £1,800 to a higher rate payer.

If you give in now you should have a good idea of what it will cost but maybe you should also consider how this will affect you in future years.

Also, in my days at HMRC, what I knew as Enquiries were carried by an individual with personal responsibility for the outcome. All letters I sent out had my direct line phone number on them. If you have such a direct line you could do a lot worse than phone and have a chat with the individual handling your case.

ioscorpio

jimmo

I sent the section of my contract relating to "Remuneration" to HMRC.

My contract says "In addition to the hourly rate and holiday pay rate, they will be entitled to receive £... per mile travelling expenses after the first 20 business miles travelled per day. All monies excluding expenses within Inland Revenue guidelines, will be subject to deductions in respect of PAYE or NI contributions and Income Tax pursuant to Section 134 of the Income and Corporation Taxes Act 1988 and any other deductions which the Employment Business may be required by law to make."

The compliance officer states I should have declared the figure on my P60 and then claimed the total expenses incurred. Relief is not due for journeys from your home to your place of work. Please let me have copies of your mileage logs in support of your claim which includes:-
Date of each journey and miles travelled
Point of departure if not your own home
Destination inc address where you worked
Details of any mileage expenses paid to you by your employer
Confirmation that the journey was made in your own vehicle

I can see now what you mean about agency workers, but it is hard to see how if you are on a site for one day that it is classed as a permanent workplace. Plus the fact, Agency 1 did not tax the mileage and in my contract it discusses "Business Mileage" and I am paid the total mileage minus the first 20 miles, so if I am in the wrong, I will accept it and have to pay back the tax relief that I have received.

jamesd

Do what jimmo said about making that call. Say that you see what they are trying to discover with the enquiry, whether the costs are or aren't deductible, and offer to do what you can to help them and you together to sort it out so the correct tax due is paid. There are two very substantial reasons for you to do this:

1. Penalties. They are adjusted up or down depending on how cooperative you are. Be sure that you act so that you are perceived as being as cooperative as possible, it'll save you money.
2. Opinion. The tax person is more likely to appreciate that you're just trying to do things right after direct person to person contact where you say so. That can improve the result for you in how they handle the case. They will still do a diligent job but there can be a big difference in how they treat someone trying to get things right compared to how they treat someone who they thing is trying to dodge. Don't let them think you're in the latter category.

Also suggest during the call that you've since learned that something called an overarching contract of employment matters and suggest that they will probably get a better answer from the agencies than you can and that you think the more recent one may have misled you, causing you to possibly file an incorrect return if it doesn't have an overarching contract of employment.

Casual workers like labourers would have a workplace that's their work site for one day, just as an agency worker might. Doesn't treat agency workers any better or worse, it's just their "permanent" short term workplace for that job. A standard permanent employee with normal office location and lots of assignments would have that normal office as their normal place of work and their differing work sites as places they can claim mileage to. An agency worker with an overarching contract of employment may effectively have the agency office as their permanent office and get the same treatment.

ioscorpio

Yes, I am going to call on Tuesday. I have just read through my contract and it states the Temporary Sales Consultant is engaged as a self-employed worker, although the Employment Business is required to make statutory deductions from the TSC's remuneration.

jamesd

In other words, it's a deliberately misleading contract. You're an employee or not, not a self-employed employee. The tax man will love them, or what can be gotten out of them.

ioscorpio

I received a letter today, stating that they are satisfied that there is no additional tax to pay and that this letter is a closure notice.

I knew that I was right, but it is a relief that investigation is over.